Analysis

Food Import Regulations Made Corruption Inevitable

Convictions of five Health Ministry food service workers for bribery, breach of trust surprised no one

Meirav Arlosoroff
Meirav Arlosoroff
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Grocery shopping in an Israeli supermarket, March 27, 2017.
Grocery shopping in an Israeli supermarket, March 27, 2017.Credit: Eyal Toueg
Meirav Arlosoroff
Meirav Arlosoroff

Five workers in the Health Ministry’s food service department were convicted two months ago of bribery and breach of trust. They admitted to taking bribes from food importers – money, gift cards, hotel vacations, vodka, creams, towels, food processors and more – in exchange for advancing the importers’ requests. The importers, and two more Health Ministry employees, are still on trial.

This corruption affair took out nearly all the senior officials in the Health Ministry’s food bureau and left it with only a handful of professional staff. The case was no surprise for Israel’s importers of sensitive foods, a category that includes perishables as well as certain non-perishables such as frozen vegetables, mineral water and dietary supplements. Beyond it apparently being an open secret that importers developed tight relationships with Health Ministry clerks, the situation within the food service department made corruption nearly inevitable.

This is what happens when you have a regulator with near-unlimited power, with opaque policies that leave clerks significant room for opinion, and with a simple verbal command can free food from the port or demand it be kept there while documents are inspected, or even be sent for laboratory tests – which means an extraordinarily long delay. The policies don’t state under which conditions which option should be chosen, even though the choice is crucial for the importers.

Sensitive food, by its very nature, is likely to have its quality impacted by long storage, and thus long tests could result in the food becoming dangerous, which is exactly what the ministry’s policies are intended to avoid. The Health Ministry itself admits this, and thus significantly relaxed its sampling requirements for sensitive food several months ago. Previously, it had called to sample 50% of dairy shipments and other perishables, a figure that it cut down significantly. Sampling of fruits and vegetables is now nearly nonexistent, at 5% of shipments.

But in practice, immediately after the more relaxed standards were publicized, the food service department published an internal memo renewing its authority to test fruits and vegetables at the port – again without criteria or transparency.

On top of this, importers go through a Via Dolorosa in order to receive a permit to import sensitive foods – a process that can take up to four months, and includes a ton of paperwork – and the food service department has refused to update its import standards, some of which are more than a decade old. As a result, food imports hit a nearly impenetrable barrier: Demands that don’t exist in Europe or the United States regarding pesticide residue, heavy metals and microbiology.

Since these are demands specific to Israel, importers struggle to find international manufacturers that are willing to adapt their products to Israel. The result, importers say, is that imports of cheese, dietary supplements and frozen vegetables are tens of percent lower.

But none of this is necessary. The Health Ministry itself is the evidence of this. In 2015, the ministry was a partner in a law know as the “cornflakes reform,” which revolutionized the import of non-sensitive foods. Instead of tests and approvals from the food service department, importers of such foods now just need to state that they meet the standards, and are entitled to import their products with nearly no testing. Thus Israel brought itself into line with food importing standards around the world.

An Economy Ministry review quantified the impact of that reform. It found that for a medium-sized importer, the cost of bureaucracy was cut from 65,000 shekels a year to only 18,000 shekels. This translates to cost cutting fo 2.6% on average for imported non-sensitive foods. Furthermore, previously it had taken 45 days on average to import; post-reform it took three days, an improvement of more than 90%. The number of processes involved in importing food was reduced from nine to five.

It appears that the reform has not negatively impacted public health. There haven’t been reports of food poisoning that resulted from the reduction in Health Ministry checks.

While the Health Ministry was overhauling imports for non-sensitive food, it was stepping backward on sensitive food imports. The regulatory cost for importers of such foods jumped to 145,000 shekels a year on average, up from 99,000 shekels, which translates into a 3% increase in the cost of importing. Prior to the reform it had taken 55 days on average to import perishables; after the reform it took 115-125 days.

The Economy Ministry’s findings support the allegations of importers of sensitive foods: While the reform has greatly improved the situation for non-sensitive food imports, it has destroyed sensitive imports. Since more than 60% of all food imports fall into the latter category – which includes perishables such as dairy, eggs, meat and fish, and also preserved fish and vegetables, frozen vegetables, mineral water, drinks based on mineral water, dietary supplements and more – then most of Israel’s food import sector is going backwards in terms of regulatory costs and a lack of transparency. The corruption affair was entirely unsurprising.

The Health Ministry argues that most of the failures of the past few years stemmed from a shortage in manpower after most of its food sector employees were arrested, and that the food services department takes considerable steps to assist importers: It intends to publicize new standards regarding pesticide residues, bringing Israel in line with European standards, and also give special status to importers that have proven themselves, enabling them shorter import procedures.

The Health Ministry is proud that Israel has never had any mass food poisonings. This is true, but they ignore the price of their policy: Importing food to Israel is expensive, limited, and noncompetitive and has been for decades, apparently unnecessarily so. Regulatory standards in the United States and Europe are much more relaxed.

The problem lies in the food service department’s DNA, a result of the Remedia baby formula affair nearly two decades ago. Following that incident, when a missing vitamin in imported Remedia baby formula led to the sickening of dozens of babies, and even some deaths, and the criminal conviction of department employees, the department has enclosed itself in a bunker and hasn’t really emerged since then. The department treats all sensitive foods with the same degree of severity, regardless of whether it’s baby formula, honey or mineral water, and it refuses to be transparent or efficient.

In theory, the food service department should be worried about Israel’s high cost of living. The only thing that should matter to it is food safety. But this is an ultra-conservative, protectionist style of regulation that sees only the risk of food poisoning – even when the chances are extremely unlikely – and ignores all the other risks, such as a high cost of living, a lack of food variety and ultimately a poorer quality of life in Israel.

In an attempt to address this, the attorney general exempted regulators from criminal responsibility in cases involving their field of oversight, contrary to what happened in the Remedia affair. But this, too, did not manage to coax the food service department out of its bunker.

So the government has other ideas. The most extreme proposal is to transfer the food service department to the Economy Ministry, in an attempt to balance interests.

But there’s another option: Simply shaking up the food service department as was done in the cornflakes reform, and better balance public health versus financial well-being.

The Health Ministry stated in response that honey is an animal product and thus needs veterinary approval, and noted that Europe also requires veterinary approval for animal products. Regarding mineral water, it does not undergo heat processing and thus is at risk of microbiological contamination. Given that mineral water is widely consumed, including by at-risk groups like babies, it undergoes strict testing.

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